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Billionaire Nassef Sawiris To Ramp Up Egypt Investments After Tax Win

Billionaire Nassef Sawiris To Ramp Up Egypt Investments After Tax Win

He said the first would be a multibillion-dollar project related to the power sector in partnership with a Middle Eastern group.

Egyptian billionaire Nassef Sawiris said his chemicals and construction group OCI will make heavy investments in Egypt after Tuesday’s resolution of a long-standing tax dispute, providing a potential boost for the struggling Egyptian economy.

Comments by Sawiris, one of Egypt’s richest men and a prominent member of its wealthiest business family, are watched closely by the types of foreign investors the country is seeking to win back after more than three years of political turmoil.

“Our first investment is going to be presented to the government this week for a multibillion-dollar project related to the power sector in partnership with a prominent Middle Eastern group,” he told Reuters.

Investors have been hesitant to return to Egypt since a popular uprising toppled veteran autocrat Hosni Mubarak in 2011, followed by more unrest and ultimately the army overthrow of Islamist President Mohamed Mursi in July 2013.

President Abdel Fattah al-Sisi, the former army chief who ousted Mursi following mass protests, has pledged to rebuild the economy and fix state finances battered by the drop in foreign investment and tourism, but businesses have remained worried about becoming entangled in costly lawsuits and bureaucracy.

Though the government has said resolving such disputes is a priority, the investment minister told Reuters last month that it had yet to resolve any big issues.

“This ruling is a big victory for rule of law and for the investment climate in Egypt,” Sawiris said after his company announced that an appeals committee had ruled in favour of the company to end subsidiary Orascom Construction Industries’ near-two-year legal battle with Egypt’s tax authority.

INFRASTRUCTURE IN FOCUS

Sawiris also indicated that OCI’s investment plans could involve Egypt’s infrastructure sector. Huge infrastructure investments, including an expansion of the Suez Canal and a massive roads project, are a critical part of Sisi’s plans for economic recovery.

A government official confirmed the appeals committee’s decision but finance ministry and tax authority officials were not immediately available to speak in detail on the matter.

The dispute, which was initiated during Mursi’s one-year rule, stems from claims that the company failed to pay 14 billion Egyptian pounds ($1.96 billion) in taxes on the 2007 sale of Orascom Building to France’s Lafarge.

OCI reached an initial settlement of 7.1 billion Egyptian pounds with the tax authority in April 2013, when Mursi was still in office, but it said in January that it had suspended payment of the December 2013 instalment pending the outcome of a broader appeal.

The statement from OCI said that all previous preliminary rulings related to the tax dispute are expected to be nullified, including judgments issued against Sawiris.

Before the 2013 settlement, the tax dispute with OCI had led to a souring of relations with the Mursi government. A travel ban was placed on Sawiris and his ageing father.

OCI, a global producer of gas-based chemicals and an engineering and construction contractor, has already paid 2.5 billion pounds under the settlement and was due to pay a further 900 million pounds in December.

A source at OCI told Reuters that the company plans to negotiate a refund of its earlier payments.

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